Morgan Stanley: Expects Mainland China's car replacement subsidy to significantly stimulate sales, Volkswagen brand is expected to capture the demand growth.

Morgan Stanley research report states that similar to last year, mass market car brands may benefit more from this policy, while traditional brands with more sales channels in lower-tier cities will also benefit. The report is optimistic about brands such as GEELY AUTO (00175), Great Wall Motor (02333), Chongqing Changan Automobile (000625.SZ), XPENG-W (09868), and BYD COMPANY (01211). The report mentions that the mainland's car replacement subsidy policy has been introduced, but as consumer demand for new cars was already met by the end of last year, it is believed that the policy's positive impact in the first quarter of this year will be weakened. It is expected that the stimulating effect will be more apparent from the second quarter onwards, especially with more car models being launched around the April Shanghai Auto Show, leading to a significant increase in car sales from the second quarter onwards.